F-35 Joint Strike Fighter assembly line

WASHINGTON: The US aerospace industrial base cannot meet emerging the Air Force’s or the wider military’s needs for rapid innovation to stay ahead of peer competitors, the Mitchell Institute says. 

“What we found was that the structure and business models of today’s aerospace defense industrial base is not configured to invent, develop or deliver the force, the future needs, and certainly not at the pace that a technologically peer adversary will demand,” Heather Penney, senior resident fellow at Mitchell, said today.

“Time is the new offset; adaptation is our new advantage,” said Dave Deptula, the institute’s dean, today.

The aerospace industrial base just isn’t capable of delivering those new capabilities fast enough because it has not been incentivized by the Air Force or DoD to do so, he explained. To change that, Deptula said, the service needs to overhaul how it develops and buys weapon systems as fast as possible — without waiting for overarching DoD policy reforms to kick start its internal efforts.

“To field advanced capabilities at the speed that our warfighters need, the defense industry needs to expand and business models must shift away from sustaining the past toward developing the future, he said. “The Air Force doesn’t have to wait on acquisition reforms, or other policies to make this happen. It can change his procurement paradigms to accelerate its own transformation and rejuvenate the aerospace industry.”

The report, Building an Agile Force: The Imperative for Speed and Adaptation in the U.S. Aerospace Industrial Base, cites three critical industrial base problems that the Air Force must address if it is to meet the goals of Chief of Staff Gen. CQ Brown’s “Accelerate Change or Lose” strategy.

  • Lack of competition among today’s few, vertically integrated mega-corporations, resulting from a paucity of development opportunities. The report notes that in the 1950s there were 19 companies building fighter aircraft; now there are two.
  • A shift in defense sector skill sets from those needed to innovate to those focused on integration. This focus “limits innovation,” because it is tied to legacy platforms and thus creates a “barrier to advancing capability.”
  • “Sustainment as a primary profit center disincentivizes innovation and new designs.”

The Air Force and DoD “can no longer rely on pursing a ‘smaller but better’ force that takes decades to field,” the report stresses. To achieve a “rebalanced force design that prioritizes adaptation and speed to provide an asymmetric advantage” against adversaries will “demand a change to the structure and business models of the aerospace defense industrial base,” the report concludes.

In order to effect that change, the Air Force itself has to change its way of developing, buying and upgrading weapon systems, the report says. This includes increasing new start and prototyping programs and encouraging new vendors.

It also recommends that the Air Force “resist future participation in any joint aircraft procurement or development programs,” which the report argues historically have not resulted in touted cost savings. Further, such programs push industry toward unhealthy consolidation, the report finds.

(That said, the report is supportive of the Air Force’s acquisition of the F-35 Joint Strike Fighter — which it calls “by far the most advanced operational aircraft in the world.”

The service further needs to keep pushing for open systems and similar tools “to create flexible and adaptive weapon systems,” and to reward companies for adopting “adaptive” manufacturing processes.

Perhaps most importantly, the reports recommends, the Air Force must use its contracting authorities to provide financial incentives for shifting “profit centers back to production” and away from sustainment, which in turn “will reshape industry towards rapid innovation, development, and fielding.”

The report’s finding echo the concerns voiced by former Air Force acquisition chief Will Roper, who argued that “innovation is the new battlefield.” Roper pushed hard to move the service away from its sustainment heavy acquisition model, especially for aircraft. He also championed the use of novel approaches to funding and encouraging new entrants to the defense market from the commercial sector, including through the AFWERX innovation hub and his brainchild AFVentures to partner with venture capitalists.

“The Air Force should use normal market incentives to reshape the aerospace industrial base to field a new force design,” the report recommends.